Bank of India DROPS Dollar in trade with China - They now ONLY take the Chinese Yuan!
This has got to have the U.S. government in an absolute tizzy and beside themselves! The U.S. went into Iraq for less than this (daring to sell oil in Euros) and dropping the dollar.
India is now trading with China using the Chinese Yuan and has dropped the U.S. dollar completely!
This is huge the two largest growing economies are now trading between each other without using the dollar! India and China feel the Yuan is more stable than the U.S. dollar now, as it is not being inflated.
Portion:
Indian buyers are at present making payments in US dollars, and they often have to convert rupee into the US currency for the purpose. The US dollars will no more be the intermediary currency as the BOI is offering direct settlement between the rupee and the Chinese money.
Chinese exporters want their money in the local currency, which is regarded as more stable compared to the US dollar. They are also in a position to have their way because Indian buyers do not have an alternative source of low-cost goods, sources said.
Now the Chinese Yuan is the currency of trade between Russia and China (they dropped the dollar last year in trade between the two), besides India and China. The Asian countries had begun trading between each other in the Yuan last year, but huge countries had held back, besides Russia.
Is this the start of more countries taking the step of using the Chinese Yuan as the currency of trade?
We can thank Bernanke and the U.S. government for printing U.S. dollars into oblivion. Here is the graph released from the Fed Reserve Bank of St. Louis of how many dollars have been printed.
Even those who have been keeping their heads in the sand about what is really happening, should look at that graph and gasp! As soon as the rest of the countries take the step that India and Russia have and the dollar is dropped everywhere, we will be Zimbabwe.
I wouldn't be surprised if even our most trusted and close allies announce in the not too distant future they will be trading with China using the Yuan and dropping the dollar. Imagine if Australia/France and other European countries take this step.......... do you doubt they will at some point in the future, to protect themselves?
Last month (January) the news had come out that India and Iran were coming to an agreement to trade Oil for gold between the two countries.
The writing is on the wall - have you paid attention? Do you have investments that will protect you when the U.S. dollar is rejected by all the countries as the trading currency? There have been enough people warning everyone this was coming, so no one should be shocked or surprised when it happens. Unless of course they only listen to MSM and hear how "Wonderful, everything is".
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A sneak attack on the U.S. dollar?
By: Eamon Javers
April 1, 2009 04:19 AM EST
|
The war began with a press release.
Dated May 13, 2010, it came from the Central Bank of the Russian Federation and said the Russian government “hereby announces the following facilities and processes which are in place and available for counterparty inquiry immediately.”
Sounds innocent enough, but savvy investment experts got the message: It was the opening salvo in a sneak economic attack on the U.S. dollar.
The Russian Central Bank was creating a new global currency, the “gold reserve dollar,” which would be issued by a financial agent in London and backed by tons of Russian gold shipped to secure vaults in Switzerland, the press release said.
The goal: to drive the value of the U.S. dollar down by 75 percent overnight and wreak havoc on the struggling American economy.
Thankfully, the press release was a fake. It was written by economic intelligence analyst James Rickards and presented on March 24 to the Unrestricted Warfare Symposium at the Johns Hopkins University Applied Physics Laboratory.
But Rickards’ point was all too real: The American dollar is vulnerable as never before to attack from hostile foreign governments. And the consequences of such an attack could be devastating . . .
|
Full article: http://www.politico.com/news/stories/0309/20723.html
Now, compare that with a story barely covered yesterday:
China "Attacks The Dollar" -
Moves To Further Cement Renminbi Reserve Currency Status
By Tyler Durden
Created 03/02/2011 - 20:24
In a surprising turn of events, today's biggest piece of news received a mere two paragraph blurb on Reuters [1], and was thoroughly ignored by the broader media. An announcement appeared shortly after midnight on the website of the People's Bank of China.
Reuters provides a simple translation and summary of the announcement: "China hopes to allow all exporters and importers to settle their cross-border trades in the yuan by this year, the central bank said on Wednesday, as part of plans to grow the currency's international role. In a statement on its website www.pbc.gov.cn, the central bank said it would respond to overseas demand for the yuan to be used as a reserve currency. It added it would also allow the yuan to flow back into China more easily." To all those who claim that China is perfectly happy with the status quo, in which it is willing to peg the Renmibni to the Dollar in perpetuity, this may come as a rather unpleasant surprise, as it indicates that suddenly China is far more vocal about its intention to convert its currency to reserve status, and in the process make the dollar even more insignificant.
Source URL: http://www.zerohedge.com/article/chi...serve-currency
Sound Familiar? Today's announcement certainly sounds a great deal like the warnings from two years ago.
Also, a lot of our contacts have been asking about the recent press. I'll post the Gertz article and links to the Fox News, CNBC, as well as the Glenn Beck comments tomorrow.
Posted by Kevin Freeman at 3/3/2011 9:49 PM | Add Comment
Economic Reality?
Before the 2008 crash, it was common belief that the Chinese economy would overtake the United States in 40-50 years. Then, near the lows in March 2009, Jim O'Neill from Goldman Sachs altered his forecast to suggest that China would overtake the U.S. in "less than 20 years." Now, after the smoke has cleared, the latest forecast from Citi suggests that even with strong domestic growth, China will become the world's largest economy in less than a decade.
It is important to note that this matches precisely with what we believe is the goal of the latest Five Year Plan from the Chinese Communist Party as described in the previous post:
"The goal of the national 12th FYP (Five Year Plan) is to smooth the way for the Chinese economy to overtake that of the U.S. in ten years or less. The military MFYP’s objectives are similar: to expeditiously close the gap between the PLA’s capacity and that of the U.S. armed forces."
US Will Be the World's Third Largest Economy: Citi
US, ECONOMY, BIGGEST, LARGEST, CHINA, INDIA, EMERGING MARKETS, ECONOMIC GROWTH, POPULATION, DEMOGRAPHIC, RECESSION, RECOVERY
Posted By: Patrick Allen | CNBC EMEA Head of News CNBC.com | 25 Feb 2011 | 04:19 AM ET
The world is going to become richer and richer as developing economies play catch up over the coming years, according to Willem Buiter, chief economist at Citigroup.
"We expect strong growth in the world economy until 2050, with average real GDP growth rates of 4.6 percent per annum until 2030 and 3.8 percent per annum between 2030 and 2050," Buiter wrote in a market research.
"As a result, world GDP should rise in real PPP-adjusted terms from $72 trillion in 2010 to $380 trillion dollars in 2050," he wrote.
As the world watches oil prices rise sharply amid unrest in the Middle East, Buiter's analysis of the world's long-term prospects offer some hope that better times are ahead but if he is right power will shift from the West to the East very quickly.
"China should overtake the US to become the largest economy in the world by 2020, then be overtaken by India by 2050," he predicted."
To read the whole article, URL: http://www.cnbc.com/id/41775174/
So, it's clear that the Chinese rise has actually benefitted from the 2008 crash. Instead of slowing down, the process of overtaking the United States has accelerated. At the same time, the Chinese have accumulated additional reserves while we have taken on more debt.
The other area to watch is the global balance of wealth between OPEC and the Western World. Then last time oil prices were at these levels, the value of OPEC oil and gas recoverable reserves exceeded the total value of ALL of the world's financial assets. Given today's price levels, that is likely true today as well. Continuing Chinese growth will cause ever increasing demand for energy and likely ever-increasing prices. So, the other major winner of the financial collapse will be those who control OPEC oil supplies. Given the recent turmoil in the Middle East, we can't be certain regarding who will control all that wealth. The Muslim Brotherhood is certainly making a play for it now.
The bottom line is that this is an Economic War being waged by sophisticated enemies with an agenda of dominance. It's time for our leaders to understand this reality as step number one.
Posted by Kevin Freeman at 2/27/2011 11:54 AM | View Comments (3) | Add Comment
The Chinese Take a Long Term View; Evaluating Their 5YP
While Americans tend to focus on the next quarter or at least the next election cycle, the Chinese have tended to think in terms of decades. This can provide an enormous strategic advantage in many areas. It also requires a longer-term perspective when analyzing any Chinese actions. It is therefore important for our defense and intelligence leadership to carefully review China's 12th Five-Year Plan (12FYP) that covers the years 2011-2015 in light of what we have revealed in regard to Economic Warfare.
According to a report by Willy Lam at East Asia Intel ( http://www.east-asia-intel.com/eai/), the Chinese now believe that their long-term path to the dominant position economically and militarily is finally within their decade-long horizon:"While the world’s eyes are glued to China’s 12th Five-Year Plan (12FYP) (2011-2015), security experts are looking at leads and telltale tidbits about the People’s Liberation Army’s (PLA) military Five-Year plan (MFYP) for the same period. Unlike the civilian version, the gist of which will be released at the National People’s Congress in early March, the MFYP will remain under wraps.The goal of the national 12th FYP is to smooth the way for the Chinese economy to overtake that of the U.S. in ten years or less. The military MFYP’s objectives are similar: to expeditiously close the gap between the PLA’s capacity and that of the U.S. armed forces."
We have already demonstrated in our prior reports:
- That the Chinese strategic military doctrine of Unrestricted Warfare call for the use of economic weapons against U.S. interests if necessary to achieve Chinese goals. This was published in 1999 by the PLA Press, reflecting the approved thinking of the People's Liberation Army.
- The ruling Communist Party essentially agreed with the doctrine of Economic Warfare and recently advocated its use against the U.S. in its official publication, Qiushi Journal.
- That even while pursuing Economic Warfare efforts, the Chinese very actively hide such efforts, masking them as "market forces."
The nature of the next phase of Economic Warfare is also well defined. We have termed it Phase 3. According to the Qiushi Journal, there is a very clear understanding of the vulnerability of the U.S. dollar as reserve currency. Likewise, the Chinese are well aware of the high U.S. debt levels and how to use them to their advantage. They also clearly understand energy issues that we face due to political constraints. Finally, the Chinese understand that U.S. budgetary problems will likely lead to a scaling back of defense expenditures just as they continue to build the PLA. Ironically, we pioneered a similar strategy that was effective in collapsing the Soviet economy and ultimately the Soviet Union.
Many have argued that the Chinese threat is overstated. They base such arguments on the belief that the Chinese would never act against their economic interests. They also point to the Chinese military budget as being less than 20% of U.S. military spending. Both arguments have serious flaws. First, we know that the Chinese had serious holdings in Lehman Brothers, Fannie Mae, and Freddie Mac. Yet, despite their collapse in late 2008, the Chinese still emerged substantially stronger on a relative basis in the global economy. In other words, despite losing money they advanced toward the goal of being the top economy in the world. In an economic warfare perspective, this is simply suffering casualties while gaining the objective.
In terms of military spending, there are two major flaws of understanding. First, Americans tend to think only in terms of hardware and personnel. The Chinese think in terms of technique. So, is economic espionage included in the military budget? No, but it does represent part of the Unrestricted Warfare strategy. The same may be said for use of cyber weapons and market manipulation. At the same time, most experts agree that the official Chinese military budget reflects only about one-third of actual expenditures. This is true to both confuse the West and to hide reality from liberal intellectuals in the country who are demanding greater expenditures on social welfare programs. The way the economy is structured with such a vast array of State-run enterprises, the world may never know exactly how great the military budget actually is.
As for the willingness to use Economic Weapons, according to a recent Wikileaks of confidential diplomatic cables, that process has already begun. In fact, according to those cables, Chinese officials pressured Treasury Secretary Geithner to support an expedited purchase of $1.2 billion of shares in Morgan Stanley. While there is no record of Geithner's response, only a single day later the Chinese Investment Corp (a $200 billion Chinese Sovereign Wealth Fund) announced the purchase. All of this is contained in a Reuter's report from 17 February 2011:
Special report: China flexed its muscles using U.S. Treasuries
http://www.reuters.com/article/2011/...71G47920110217 .
To summarize:
- The Chinese take a long-term view.
- Their goal is to achieve economic and military superiority within a decade.
- They recognize the value of Economic Weapons, including collapsing the dollar if needed to achieve their goals.
We know all of this from official sources. We also have evidence that supports this reality. Most recently, we see that the Chinese are acquiring gold at a very rapid pace. According to a report in The Street, (http://www.thestreet.com/story/11009...-standard.html):"China bought 175.2 tons of gold in the fourth-quarter of 2010, bringing its grand total for the year to 579.5 tons, or 18.5 million ounces, according to the World Gold Council. That's a lot of gold. The U.S., in comparison, consumed 233.3 tons in 2010. It's unknown how much of that gold was consumed by citizens or its central bank, but the question still remains — What will China do with all that gold? There is a controversial theory percolating in the gold community that China wants the yuan to become the world's reserve currency and is buying gold and silver in order to do it."
While we can't know for certain, the rapid acquisition of gold represents another significant puzzle piece that is consistent with other evidence suggestive of Economic Warfare as we have been describing.
Posted by Kevin Freeman at 2/21/2011 4:00 PM | View Comments (2) | Add Comment
China Ready for Economic War (analysis)
The Times of India reports (based on Qiushi, the official Communist Party publication) that the Chinese are planning a Phase 3 Economic War (as we have warned for two years).
We already are aware of the Chinese strategic doctrine of Unrestricted Warfare as published by the PLA in 1999 that supports what we have been saying 100%, but also now we have the official publication of the Communist Party outlining plans for an economic war against the United States. This is exactly what we predicted in the paper written for DoD nearly two years ago. [We posted on Unrestricted Warfare earlier in the Blog.]
What is so essential about this article is that it:
1) Acknowledges what we have been sharing that our primary vulnerability is economic. They see our currency and free markets as a weapon to use against us.
2) Blatantly proclaims that they will use market forces to mask their intended activity. [I believe they have been doing this for years.]
3) An intention to use our free media (as opposed to State-controlled) to launch a public-opinion war.
We have a very clear outline of intentions. For years, they have been masking their efforts as "market forces" and obfuscating their efforts in the media. Now we have a clear acknowledgement in their own paper of such efforts.
It is absolutely essential that our leaders, especially those charged with defending our national interests begin to acknowledge and understand this issue. My report produced for DoD in early 2009 is a good primer on the subject. Since then, I have continued to monitor, inform, and educate as many as I can. This Blog is one forum that enables information to be disseminated.
This is a commentary on an article in today's edition of the Times of India (excerpts and a link to the full article can be found on the Blog).
Posted by Kevin Freeman at 2/12/2011 1:19 PM | Add Comment
China Ready for Economic War (the article)
Excerpted from Times of India:
'China ready to go to war to safeguard national interests'
PTI, Feb 12, 2011, 04.06pm IST
BEIJING: Terming US attempts to woo India and other neighbours of China as "unbearable," an article in a Communist party magazine has said that Beijing must send a "clear signal" to these countries that it is ready to go to war to safeguard its national interests.
The article published in the Qiushi Journal, the official publication of the ruling Communist Party of China (CPC) said China must adhere to a basic strategic principle of not initiating war but being ready to counterattack.
"We must send a clear signal to our neighbouring countries that we don't fear war, and we are prepared at any time to go to war to safeguard our national interests," the article said, suggesting an aggressive strategy to counter emerging US alliances in the region....
"Throughout the history of the new China (since 1949), peace in China has never been gained by giving in, only through war. Safeguarding national interests is never achieved by mere negotiations, but by war," it said.
It suggested that China should use its economic clout and trade as a weapon to rein in neighbours....
China on its part, it said, can consider the idea of launching economic warfare through strategies to contain the US dollar and making effective use of forums like the IMF and initiating a space war by developing strong space weapons...It also said the China should also launch a public opinion war by making an effective use of the free media in the US and other democracies.
"Of course, to fight the US, we have to come up with key weapons. What is the most powerful weapon China has today? It is our economic power, especially our foreign exchange reserves (USD 2.8 trillion). The key is to use it well. If we use it well, it is a weapon; otherwise it may become a burden," it said.
China, it said, should ensure that that fewer countries should keep their forex reserves in US dollars.
"China, Japan, the UK, India, and Saudi Arabia are all countries with high foreign exchange reserves," it said analysing each country's ability to align with China against the US.
So in view of this China should "pick up courage" and go for aggressive buying of other currencies, including the Indian Rupee hence taking the lead in affecting the market for US dollars.
This approach, it said, is market-driven and it will not be able to easily blame China.
"Of course, the most important condition is still that China must have enough courage to challenge the US currency. China can act in one of two ways. One is to sell US dollar reserves, and the second is not to buy US dollars for a certain period of time," which will weaken the currency and cause deep economic crisis for Washington.
Given the fact that China is the biggest buyer of US debt, its actions will have a demonstrable effect on the market.
"If China stops buying, other countries will pay close attention and are very likely to follow. Once the printed excess dollars cannot be sold, the depreciation of the dollar will accelerate and the impact on Americans wealth will be enormous.
"The US will not be able to withstand this pressure and will curtail the printing of US currency," it said.
Read more:
'China ready to go to war to safeguard national interests' - The Times of India http://timesofindia.indiatimes.com/w...#ixzz1Dlgtl6H0
Posted by Kevin Freeman at 2/12/2011 12:39 PM | Add Comment
Lessons from Egypt
For several decades, Egypt has been considered an important American ally in the Middle East. The nation, under Mubarak has also been a source of stability and peace, including with Israel. The regime was dictatorial and even brutal, especially against elements such as the Muslim Brotherhood. The toppling of Mubarak offers some important lessons on many fronts.
For students of financial terrorism and economic warfare, there are two primary takeaways:
1) The trigger to the unrest was food prices. It has been widely reported that food inflation was a if not the primary factor behind the initial unrest. Egyptian households spend about 40% of their budget on food and food prices increased 20% in the past year. Corn prices shot up 90% and wheat slightly less.
2) Speculation played a role in higher food prices. Certainly the global monetary inflation made this possible. Another factor has been economic progress in emerging markets whereby people have been improving the quality and quantity of their diets. Both of these have justified higher prices. Speculation has been a factor on the margin. As we know, however, the marginal factors are generally the ones that create a tipping point. My sources tell me that this has been the case so far and that speculative interest in food is growing,
Both of the takeaways are factual.There should be no doubt that there was a serious economic component behind the events in Egypt. The question then becomes whether or not additional speculation on food prices could be used as a geopolitical lever. Based on our research, the answer is an unequivocal yes.
We are not saying that the Muslim Brotherhood speculated on food prices as a weapon to topple Mubarek, although some sources say that was the case. We are saying that whether or not they did, it is obvious that such a weapon could be used, albeit imprecisely. If done properly, it could even be used profitably. The cost is certainly less than a major arms program but the results are dramatic.
We would hope that our Intelligence Community has studied this in detail and prepared contingency response sets. Based on the fact that Obama's Intel Chief, Admiral Clapper, believes that the Muslim Brotherhood is a "secular" organization, we aren't very confident. For more than two years I have been informing and educating the Defense and Intelligence communities regarding the risks of financial terrorism and economic weapons. Some are beginning to notice.
Posted by Kevin Freeman at 2/11/2011 11:00 AM | View Comments (1) | Add Comment
Foreign Control of our Capital Markets?
It has been widely reported that Deutsche Börse of Germany will be absorbing the New York Stock Exchange if a planned merger is allowed to consummate. Make no mistake, regardless of how this is spun, it reflects a decline in American position. It may also be a serious risk to America's national security and sovereignty.
The Wall Street Journal stated it this way:
http://online.wsj.com/article/SB1000...LEFTTopStories
There has already been a good deal of commentary on the economics of the deal. According to the release, there will be efficiency-based cost savings counted in the hundreds of millions of dollars per year. What has barely been discussed, however, are the national security implications. On CNBC tonight, Larry Kudlow touched on this with guests Harvey Pitt (former SEC Commissioner), and California Congressman Ed Royce. One of the key questions they addressed is, "Who would have regulatory authority? Would it be the U.S. or the 60% German owners?
Obviously, Germany has been a long-term ally. But, there is a whole new layer of complexity having the Germans in control. For example, we can't be certain how much Chinese or Middle Eastern money may be hidden in the German offer. Given everything else we have uncovered on this Blog and in our research, we should be VERY careful about giving up our economic sovereignty. Our economy depends on our capital markets. It is essential that they are free of any potentially subversive elements. Our future depends on it.
Posted by Kevin Freeman at 2/9/2011 7:00 PM | Add Comment
NASDAQ Admits Hacker Attempts, But Told to Keep Quiet
Following the release by the Times (London) of our DoD report on financial terrorism (see previous post), a series of revelations have supported its conclusions. The most recent has been an admission by NASDAQ that they discovered secret files placed on their computers without their knowledge. At about the same time, the FBI admitted that they had been warning Wall Street firms that they had information suggesting that there is an intended attack by jihadists.
Nasdaq admits security breach, denies data access by hackers
http://www.banking-business-review.c...hackers-070211
Published 07 February 2011 "Nasdaq OMX Group has admitted that it found suspicious files on its US computer servers, but denies that hackers had accessed or acquired customer information or that its trading platforms were compromised.The admission comes in the wake of series of media reports that hackers have repeatedly made their way into the computer network that runs the Nasdaq Stock Market during the past year.
Nasdaq said the files were detected late last year, and it immediately contacted forensic groups and US law enforcement agencies.The attack came in the form of suspicious files known as 'malware', pointed at Nasdaq's Directors Desk service, a web-based application where some 5,000 companies store documents for board members.
The Federal Bureau of Investigation is investigating the attacks alongside the US Department of Justice, but officials have remained silent and no one is authorized to release a statement at this time."
The reason that this is so significant is because most of our leaders have been living in denial on this very important issue. I have briefed leaders in both House and Senate as well as major agencies. Many found our claims of current and planned attempts to bring down our economy "too frightening to imagine." This seems remarkably like the Ostrich—-hide your head in the sand and hope the bad things go away. Fortunately, we have found some good people in the leadership who are willing to listen, learn, and address the problem.
Our group has incredible documentation that demonstrates the intent to attack our economy from original documents produced by China, Venezuela, other nations and various Islamic Jihadists. They state in very direct terms an understanding of how to bring down our financial markets as well as, in most cases, a desire to do so. My research has clearly demonstrated vulnerability. Now, in addition to everything my group has provided before in this regard, we have clear and compelling proof that attacks have been undertaken. This should be no surprise. America has enemies who hate everything our nation has represented. We are a nation built on Judeo-Christian principles, loves freedom, and stands for truth. The financial markets simply represent a potential vulnerability. Better said, our open markets can serve as a weapon against us if we remain ignorant and unprepared.
Please understand that there is substantially more to these stories than has been shared with the public. In fact, CNBC provided the following revelation (http://www.cnbc.com/id/41463670):"Nasdaq was advised by federal law enforcement officials not to alert its existing customers of the cyber attacks..."
There are two points:
1) It should be abundantly clear that our financial markets are targets. Anyone who believes this is isolated is simply naive. There are very likely many other instances in which we simply haven't yet discovered the intrusion.
2) We know for certain that even when attacks have been discovered, officials have made efforts to keep the information from getting out to the public.
When you understand these two truths, you understand that the public is made aware of only a portion of what officials know and there is still likely much that officials don't yet know.
Stay tuned to both the news and this Blog. You will increasingly see evidence that supports what we have been sharing regarding Financial Terrorism and Global Economic Warfare. We are making every effort to work with leaders and law enforcement to keep our markets and economy safe.
Posted by Kevin Freeman at 2/8/2011 10:59 AM | Add Comment
Financial Terrorists Pose Grave Risk to U.S.
Story that appeared in Times of London yesterday:
Financial Terrorists Pose Grave Risk to U.S.
Alexandra Frean New York
Last updated February 2 2011 12:01AM
The US financial system remains vulnerable to a co-ordinated act of “financial terrorism” that risks taking down the US economy and collapsing the dollar, according to a confidential report commissioned by the Department of Defence in Washington.
The document warns that forces hostile to the US could mount a “focused effort to collapse the dollar by dumping Treasury bonds” and urges the security services to conduct a further risk assessment “outside of traditional Washington and Wall Street circles”.
It also suggests that the financial meltdown of 2008, which wiped out an estimated $50 trillion of global wealth, may not have been the spontaneous result of poor regulation and bad risk assessment among financial institutions, but a co-ordinated series of attacks by “financial terrorists intent on destroying the American financial system”.
The disclosure of the report’s contents to The Times came as the FBI confirmed that it had warned major Wall Street institutions of a potential threat to their businesses and executives after an al Qaeda-linked magazine, Inspire, suggested that financial markets could be a target of attack.
A spokesman for the FBI in New York confirmed yesterday that security briefings for Wall Street firms took place last month, but said that the information that was discussed was “not imminent, not specific”. The briefings reflect concerns in some quarters of the Pentagon about the vulnerability of America’s financial and economic system to terrorist attack.
The FBI move follows revelations in The Times this week that stock exchanges in Britain and the United States have turned to the security services for help after discovering that they were the victims of terrorist plots and attempted cyber attacks that aimed to spread panic in leading global financial markets last year.
The 110-page document commissioned by the Irregular Warfare Support Program (IWSP) of the US Department of Defence is entitled Economic Warfare: Risks and Responses. It has been circulated among defence chiefs in Washington but has never been made public. It was delivered to the IWSP in June, 2009, eight months after the collapse of Lehman Brothers triggered the financial crisis, but has remained under wraps since then as the attention in Washington focused instead on introducing financial reforms.It resurfaced two months ago when it was submitted by the Department of Defence to the Financial Crisis Inquiry Commission (FCIC), the official US Government-appointed body investigating the causes of the 2008 crisis.
The report examines the possibility that gaps in the US financial regulatory system “were subject to exploitation not only by greedy capitalists seeking profit, but also by financial terrorists intent on destroying the American financial system”. It adds that high levels of debt, especially housing debt, taken on by American households added to the country’s vulnerability.
Drawing heavily on academic and other texts, the report outlines a scenario in which US economic security could be undermined in a three-phase attack. The first could have been the surge in oil prices fuelled by speculators in 2007. The second phase would have begun in 2008 with a series of bear raids targeting US financial services firms, most particularly Bear Stearns and Lehman Brothers, in which investors bet that the stock of those companies would fall in value.
The third phase could take the form of a direct economic attack on the US Treasury and US dollar, the report says.
“A focused effort to collapse the dollar by dumping Treasury bonds has grave implications including the possibility of a downgrading of US debt and... removing [the dollar] from reserve currency status,” it says.
“Such an event has already been discussed by finance ministers in major emerging market nations, such as China and Russia, as well as Iran and the Arab states,” it adds.
The report suggests that any number of foreign-based individuals or organisations, ranging from sovereign wealth funds to Russian mobsters and al-Qaeda and even one or more of Brazil, Russia, India and China could have the means and motive to perpetrate or commission acts of financial and economic terror on the US. While it does not accuse any of these parties of wrongdoing, it outlines the potential threat they pose and concludes that the fact that there is reasonable credibility to this threat “justifies very serious consideration”.
“Ignoring the likelihood of this very real threat ensures a catastrophic event,” it warns. The report recommends the creation of a special unit to “implement appropriate counter-measures to emerging threats in co-ordination with key defence, intelligence, and financial agencies.”
The document’s author, Kevin D Freeman, is founder and chief executive of Freeman Global Investment Counsel, a boutique investment advisory firm, who was commissioned by the Department of Defence in 2009.
Although the views contained in the report represent Mr Freeman’s views and not those of the Department, e-mails seen by The Times confirm that the department commissioned the report, circulated it among defence chiefs and passed it to the FCIC in November or December last year.
The US Department of Defence declined to comment on the report.
Posted by Kevin Freeman at 2/3/2011 12:21 AM | Add Comment
Financial Warfare in Egypt
Nearly everyone on the planet is aware of the riots taking place in Egypt. Most understand that there are serious geopolitical ramifications.
When you look behind the cause of the riots, however, it begins to become obvious that there was an economic trigger. High unemployment rates with rising food and energy prices may not have been the only cause behind the turmoil. But, no objective analyst can deny that they were a, if not the serious factor at work.
There's no doubt that numerous factions are currently exploiting the situation. Egypt has been under dictatorial rule for decades. Nevertheless, the situation there now echoes the truths of Economic Warfare. Regardless of the cause in operation now, we have proven that it is possible to manipulate commodity prices, at least for short periods. It may even be done undetected.
I have heard rumblings that Egypt may currently be the target of economic warfare. At a minimum, my research suggests that current events are collateral damage from financial weapons.
So, the questions of the day:
1) What role, if any, is economic warfare playing in destabilizing Egypt?
2) Even if not at work there now, are terror factions learning from the situation, ready to use economic weapons in the future?
Controlling food supplies is an age-old method of warfare. Controlling food prices via market mechanisms is a new form of that weapon that could be utterly devastating. The Chinese call this a "new concept weapon" in their book Unrestricted Warfare. Their comment on America in this area:
"the Americans have not been able to get their act together in this are (new concept weapons). This is because proposing a new concept of weapons does not require relying on the springboard of new technology, it just demands lucid and incisive thinking. However, this is not a strong point of the Americans, who are slaves to their technology in their thinking."
What this says is that we may be playing checkers while others are playing 3-dimensional chess. I have seen that first-hand with many of our defense and intelligence experts who stretch to even imagine that the financial markets could be weapons. Fortunately, a few "get it" and have been working to address the serious issues.
Re: Secret moves launched by China, Russia, Japan, France, Arab States to end the Dol
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